Christine Benz: Hi, I'm Christine Benz for Morningstar.com. Making good decisions about Social Security involves getting your arms around a lot of different factors. Joining me to discuss some tools on the Social Security Administration's website is Doug Nguyen from the Social Security Administration.
Doug, thank you so much for being here.
Doug Nguyen: Well, thank you for having us, Christine.
Benz: Let's start, when we are looking at the ssa.gov website. When I go on to this site, I'm asked to create an account. Why would I want do that versus just kind of surfing around anonymously.
Nguyen: We're very excited about this expansion of our online services, Christine, because it's becoming the preferred way of doing business with Social Security in terms of how the public is concerned. We are encouraging all people who are entering their work years and even for those who are receiving Social Security benefits currently to go in and establish a My Social Security account because through My Social Security, people who are in their working years can get a look at the online Social Security statement that they can get an personalized statement that would give them estimates of their retirement, disability, and survivors benefits. For those individuals who are currently getting benefits, they can go online and actually get a benefit-verification letter for loan purposes, for housing purposes. They can change or start their direct deposit information or change their address online. And none of those services they were able to do before the My Social Security account.
Benz: So, we used to get those statements, those annual statements in the mail that summarized our anticipated benefits in retirement. Those aren't coming anymore?
Nguyen: That's right. Now, we introduced the new online statement in May 2012. Again, this is a cost-effective way for us to provide this information to the public. With this month's expansion of My Social Security account, they can create their own Social Security statement; they can get that personalized online statement.
Benz: So, certainly any time you're entering a lot of personally identifying information, your Social Security number and so forth, you want to make sure that your own online security is as good as it can be. How about the Social Security's website--that security? Are you comfortable with that, people entering a lot of personal data there?
Nguyen: That's a very, very good question, and a very important question. Protecting the public's information is of utmost importance to the Social Security Administration, and that's why we use the strongest commercially available encryption software in all of our websites and applications to protect the public's information. One piece of information that your viewers need to know, if it's not socialsecurity.gov or ssa.gov, it is not our website. We are not socialsecurity.com; we're not socialsecurity.org. And so people need to be aware of which website they're entering.
Benz: That's a really good point. So, you've got a lot of resources on the site in addition to a lot of this personalized information we just talked about and a lot of tools. So, there is a Social Security retirement planner. Let's talk about some of the key tasks that that tool enables you to do?
Nguyen: Right. Well, the three questions that people in their working years need to consider as they approach retirement years, three main questions are: How long am I going to live? Will I have enough income in my retirement years? And what are the other sources of income that I'm going to have to supplement the Social Security benefits? [The benefits] were only designed to provide 30% to 40% of a person's income during their retirement years. So, the retirement planner provides all of the information that they'll need to do those three steps of planning, calculating, and of course applying for their Social Security benefits. Through the planner, they can get an estimate of their life expectancy, as well as the retirement estimator, which provides again that personalized online benefit estimate. And if they are a public employee, they can also find the information on how their public pensions will affect their Social Security benefits.
Benz: Now, you mentioned that you have a life-expectancy calculator, but obviously that's a really personalized fact that your own life expectancy is very individualized. So, your tool just looks at sort of average actuarial data?
Nguyen: Exactly, and of course none of us are guaranteed tomorrow.
Nguyen: With that being said our data or historical data shows that a man reaching age 65 today can expect a live to about 83, a woman reaching 65 today would expect to live until about 85, and again all of those are averages. Just about one out of every four 65-year-olds today will live past age 90 and one out of 10 will live past age 95 according to our actuarial data.
Benz: So those are some of the things that are contained within the retirement planner. You also have a retirement estimator tool as you just mentioned. What's in that tool and how does it allow you to model out your scenarios for the benefits that you might receive over your lifetime?
Nguyen: Well, the retirement estimator is an important element of the retirement planner. Through the retirement estimator, individuals can compare different scenarios in their retirement options. We provide up to four to five different scenarios. People can change the age at which they want to stop work or they can change the amount of their future earnings and all of that goes into an online benefit estimate that is directly tied to their own earnings record.
Benz: Now, how about if I'm attempting to do some modeling with my spouse, can I put those two records together to model out which is the best time for each of us to receive our benefits?
Nguyen: I would compare the retirement estimator to like the 1040EZ versus the full 1040A, if you're filing income tax. It's really individualized in terms of your particular scenario. So, it will not take into account spousal benefits or survivors. It is just a personalized retirement estimator for you as an individual.
Benz: Then there are obviously also other things that you can do on the site. One of them you note is filing for benefits.
Benz: So, let's talk about that and the steps that someone would need to take to get their benefits going?
Nguyen: Right. Well, one of the things that we're excited about in terms of the retirement application is that it takes us as few as about 15 minutes to file online. Again, people can conduct their business with Social Security in the comfort of their own home. They can go into the application. If they have cold feet, they can back out and come back in later to complete the application. They don't have to visit us or call us. It takes us as few as 15 minutes, and all they need is a few pieces of information regarding themselves, their dependents, and their spouses, if they have spouses.
Benz: How about if they have questions and they need customized help though, how do they go about getting that?
Nguyen: At the top of our website, Christine, there is a link Contact Us. They just click on Contact Us, and we give them various ways to contact us. Again, they can call us, they can send an email to us or, of course they can visit their local Social Security office. Also, there is a space for frequently asked questions. That's one of our most popular services on the website. They can just click in their personal question and then get a general answer coming back.
Benz: Doug. Well, thank you so much for being here to share some of these resources.
Nguyen: Well, thank you very much Christine.
Benz: Thanks for watching. I'm Christine Benz for Morningstar.com.